Steel Buyer's Perspecive: Who Takes the Lead - Sales or Purchasing?
Written by: Tony Bonavita, General Manager, Steel Market Update
The issue of “control” within an organization and the building of private empires constructed around either the sales and/or purchasing organization is an issue many companies deal with on a daily basis. As a former manager of metals purchasing for a large wholesale/distribution company I got to interact on a daily basis with the sales department at all levels. Through the process I managed to learn some techniques which improved our communication skills and led to a positive work environment.
Perhaps you or others within your company have heard the following comments between steel purchasing and sales professionals:
Sales to Purchasing: “When will you learn how to buy right?”
Purchasing to Sales: “Why would you give our inventory away?”
The relationship between buyers and sellers within the same organization is certainly dynamic. They play on the same team, just different sides of the field. They are in the same band, just on different instruments. They tackle the same business opportunity, just from unique skill sets and perspective. Neither would succeed without the other, despite how inwardly focused each function can be. In your organization, who leads the charge on the battlefield? Should sales drive purchasing? or vice versa?
The answer to that question is simple, it depends. It depends on the customer base your business pursues, the nature of your inventory flow (whether contract or spot), the culture within your organization and the tenure, experience and maturity of various stakeholders. One company with long standing contractual customers with highly specific order requirements may see the purchasing professional take a very pro-active role. Another company that slings tons on the spot market one or two loads at a time will likely have sales professionals take a very pro-active role. Either way, that balance is unique to your organization.
What is necessary to achieve organizational goals is having both functions seamlessly and interdependently work together no matter who leads the dance. How can an organization create a positive dynamic between sales & purchasing?
Keep the goal-line front and center – At the end of the day, it’s what’s on the scoreboard that counts. When a major contract has been won, all team members should be celebrating together, recognized together for their individual and cumulative contributions, both sales and purchasing. Failure should also bring equal ownership and accountability. Both functions, where possible, should have common or linked measurements targeting the same goal. Different paths should still lead to the same end.
Recognize commonality - Personalities between both sales and purchasing team members can also have common traits. Both can be very competitive, willing to take risks and dogmatic in their views. Create opportunities for those traits to work together against your competitor, rather than against each other. Utilize special project teams as a means of not only achieving a goal, but to build relationship and understanding through the process.
Kick the purchasing professional out of the office and into the field – A wise executive once counseled me as a purchasing agent to get into the sales field and meet our customers, understand their problems and see the challenges the sales team faced. It was great advice. Numbers and data tell one story, experiencing a day in the life of the sales function is another. It shouldn’t occur every week, but when you see yourself thinking in a silo, get out of the office.
Bring the sales professional home – Pull your best sales professionals into supplier discussions from time to time to give them insight into the buying process and bring fresh perspective. Have them participate in your vendor review process. Give them opportunities to actively submit feedback and let their voice count. A sales professional who understands the sourcing strategy at large is better prepared to translate that approach to value for the customer. Bust silo thinking on both sides by providing mechanisms and opportunities to see the bigger picture.
I am sure others will have other additional suggestions about how to create a positive dynamic between the sales and purchasing functions.